SEBI tightens settlement regulations

PTI Jaipur | Updated on January 12, 2018 Published on January 14, 2017

SEBI will provide incentives to defaulters coming on their own to settle cases before start of enforcement action while excessive delays in filing of settlement applications would be liable for higher charges.

In this regard, the board of SEBI (Securities and Exchange Board of India), during its meeting here today, approved various amendments to existing norms for settlement of administrative and civil proceedings.

The markets watchdog said the amendments have been approved in order to streamline and strengthen the settlement process.

With the amendments, SEBI would have power to charge interest in case of excessive delays in filing of applications or payment of settlement amount apart from providing incentive for defaulters to come “voluntarily on their own, before initiation of investigation or enforcement action“.

The amended norms would also pave the way for settlement notice before issuance of a formal show cause notice, except those that are excluded from settlement.

Among others, re-application of rejected or withdrawn applications in deserving cases, subject to payment of additional fees and interest would be permitted.

According to a release issued after the board meeting, situations when joint and several liability is taken into account for determining settlement amount would be considered under the revised norms.

In this regard, SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 would be amended.

As part of efforts to further empower stock exchanges, SEBI board has decided to allow bourses penalise listed companies in case they violate ICDR (Issue of Capital and Disclosure Requirements) Regulations.

With these changes, stock exchanges would have power to enable actions such as imposition of fines and suspension of trading.

At present, these provisions are available for exchanges only under the SEBI LODR (Listing Obligations and Disclosure Requirements) Regulations.

ICDR norms pertain to companies raising funds through public, rights, preferential or bonus issue of securities.

“This will reduce cost of undertaking adjudication/ quasi-judicial actions in case of minor violations for the listed entities,” the release said.

SEBI would issue appropriate guidelines providing for standard operating procedure in this respect.

Published on January 14, 2017

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